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4th Industrial Revolution:
Challenges and opportunities for agriculture
N
o commercial activity can escape the implications of the
fourth Industrial Revolution; the 21st century blending of
the physical, digital and biological domains that is building
on the digital revolution of the last century to bring massive
change to agriculture and across value chains into the agro-process-
ing industries of South Africa.
As with previous Industrial Revolutions, the fourth revolution will
introduce new challenges and opportunities for the agricultural sec-
tor, it means changes through the value chain from crop production
and the agro-processing chain by improving processes, increasing
productivity and reducing costs.
There is no doubt that increased use of technology that begins in
the fields presents opportunities to transform the agricultural base
and the agro-processing industries that process agricultural prod-
ucts. Agro-processing is the largest employer within the manufac-
turing sector and could further increase its importance within the
local economy.
According to the Department of Trade and Industry, in 2016 the con-
tribution of the agro-processing industry to the real value added
(GDP) by the manufacturing sector and the economy was 32,2%
and 4,4% respectively. The contribution of the agro-processing
industry to the real output of the manufacturing sector and the
economy was 31,6% and 7,7% respectively. Total imports in rela-
tion to the manufacturing sector and the economy was 18,2% and
9,7% respectively.
The potential of the converging technologies of the fourth Indus-
trial Revolution lies in providing South Africa with an opportunity to
become early adopters of technology and accelerate its agro-
processing development.
Some of the most recent advances in technology and biotechnology
that are transforming food production and are impacting on agro-
processing efficiency include:
The use of drones at the start of crop cycles to produce accurate
3-D maps for early soil analysis and seed planting patterns, crop
spraying and crop monitoring.
Using data and analytical tools to create ‘smart farming’ tools
that can help improve yields and crop quality, increase produc-
ers’ returns, reduce water consumption and even greenhouse
gas emissions.
International research and development companies creating an-
alytical tools that use decades of research with new technologies
(such as wireless data transfer and cloud computing) to transfer
data on soil quality, nitrogen levels and the overall quality of soils
and other operational requirements direct to producers.
The future use of nanotechnology – the manipulation of mat-
ter on an atomic, molecular, and supramolecular level. For ex-
ample, nano porous zeolites are already used to slowly release
efficient dosage of water and of fertilisers for plants, and of
nutrients and drugs for livestock.
Some of the tools already used in Africa include:
Scientists in Nigeria creating a pest-resistant black-eyed pea
that will resist pests that destroy $300 million of crops annually.
The development using mobile technology of the ‘Farm Shop’,
Kenyan franchise network of agro dealers located in rural and
under-served areas of Kenya. Each store has an Android-pow-
ered tablet with software that allows users to easily order inven-
tory and track transactions in real-time, giving the company a
unique ability to track prices and inventory levels.
The mobile-based
iCow
app, an agricultural information service
to help producers enhance productivity of their cows. For ex-
ample, it helps in the prevention – and cure – of milk-related dis-
eases by tracking each cow.
Esoko
, an app that assists rural producers to identify markets
where their products and produce will receive the best prices.
One of the challenges for agriculture and agro-processing locally is
the potential negative impact more adoption of technology could
have on jobs in the sector.
However, in South Africa, authorities, although conceding that
large enterprises in the agro-processing industry contribute signifi-
cantly to income and employment, point out that the relative share
of small and medium agro-processing to total employment numbers
is higher than their share of total income in the industry. Accordingly,
they say, small and medium-sized processing enterprises have great
potential for generating sustainable jobs while using technology to
increase their incomes.
Barriers to entering the mainstream economy for small and medium-
sized agro-processing operators include:
High post-harvest losses.
Lack of appropriate agro-processing technologies suited to
start-up agro processors.
Non-compliance with stringent agro-processing norms, stand-
ards and regulations.
Inconsistent supplies of raw material.
In South Africa, many activities within the agro-processing space
are characterised by large companies that are vertically integrated
along the entire value chain. For instance, the poultry industry has
players that have grown activities within one sector of the chain into
others. By using their original outputs, for instance production of
feeds, they have entered the broiler and other areas of the chain.
Typically, small operator entering the poultry value chain would have
to cope with repetitive production cycles before he/she could expect
to become profitable, while competing with established players.
Ultimately, as the fourth Industrial Revolution gains traction, com-
petition will ensure that technologies available will become simpler
and cheaper, creating opportunities for smaller operators to take up
their places in the agro-processing chain.
NICO GROENEWALD,
head, Standard Bank Agribusiness
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